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Excess Wages Example - 2nd Quarter

Excess Wages Example - 2nd Quarter

  1. Calculate each person's excess wages.

    John Smith
    John Smith earned $4,000 in this quarter. Including his first quarter wages, he has earned a total of $8,000 this year. John Smith has no wages over the taxable wage base ($13,000), so none of his wages are excess wages.

      Total Wages Taxable Wages Excess Wages
    Quarter Wages for the year for the year for the Quarter
    $4,000 $8,000 -$13,000 $0

    Jane Doe
    Jane Doe earned $7,000 in this quarter. Including her first quarter wages, she has earned a total of $14,000 this year. Because Jane Doe has earned more this year than the amount of the taxable wage base ($13,000), the amount above the wage base ($1,000) is excess wages.

      Total Wages Taxable Wages Excess Wages
    Quarter Wages for the year for the year for the Quarter
    $7,000 $14,000 -$13,000 $ 1,000
  2. Calculate the employer's total wages and total excess wages.

    Now that we have the total and excess wages for each worker, we can calculate the employer's total wages and total excess wages for the quarter.

      Wages this Quarter Excess Wages
    John Smith $4,000 $0
    Jane Doe $7,000 $1,000
    Total $11,000 $1,000

    These totals go in item 4, "Total Wages Paid" and 5, "Wages Paid in Excess of $13,000" on the Quarterly Contribution and Wage Report.

  3. Calculate taxable wages.

    The total wages paid this quarter minus excess wages gives the employer's taxable wages for the quarter.

    Total Wages - Excess Wages = Taxable Wages
    $11,000 - $1,000 = $10,000

    This is item 6, "Taxable Wages" on the Quarterly Contribution and Wage Report.

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